Tag Archives: developers

Targeting Santa Monica homeowners in order to build mini-mansions

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The housing market in Santa Monica, California is apparently in good shape: homeowners are being targeted by those who want to tear down their smaller homes and build bigger ones.

Santa Monicans are being targeted by real estate agents representing developers looking to turn small homes in desirable neighborhoods into mini-mansions that can be sold for double the original asking price.

The agents tend to single out older homes, often taking up a relatively small portion of the parcel on which they sit, offering a cash purchase and a promise by the buyer to take care of normal closing costs, provided the homeowner does not broadcast their intent to sell.

Residents report notes left on their doors, direct mail bearing a picture of their own home and even direct phone calls soliciting sales.

That practice is called by many names, including off-market listing, pocket listing or quiet listing, and while it is completely legal, it often is a bad deal for sellers in hot markets like Santa Monica, said Don Faught, president of the California Association of Realtors…

Sosin led the charge in the late 1990s against “McMansions,” homes built to the margins of their property lines. They overshadowed neighboring properties, and led to the death of many mature trees that had to be removed so that the home could be built out.

Her work resulted in new rules around single-family homes, requiring set backs and imposing controls over how much of a parcel can be covered.

The attempts to build to even those restricted maximums are unwelcome, she said, because they only succeed in making neighborhoods more expensive to move in to and replace quaint, well-loved homes with larger versions.

It sounds like the resident quoted above is ready for a teardown battle, should one develop, but the article makes it sound like people are generally unhappy with this approach. The real question in my mind is whether these sorts of real estate tactics are successful. Does this suggest developers are worried about how the community will react to more public plans to build bigger teardowns or is this primarily a way to get real estate at a cheaper price before it hits the open market? Either way, I would want to know how many homeowners actually sell their homes in such a way and how they negotiate the peer pressure in the neighborhood versus the offer from developers.

Also, is the use of the term “mini-mansion” intended to avoid using the term McMansion? I would expect McMansion in this sort of situation, particularly from unhappy residents…

h/t Curbed

How a developer of big homes differentiates his homes from McMansions

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Few builders are aiming to have their new big homes labeled McMansions. Here is how one developer describes how his new homes differ from McMansions:

According to brothers Taylor and Milton Chamberlin, the goal for the Georgian style homes is for them to be an alternative to “McMansions.”

“We really take our time to design the homes to fit in the neighborhood. We’re not builders that come in and put this huge McMansion in a small neighborhood where it doesn’t fit. That’s not what we do,” said Taylor. “All of this is really thought through and it’s really livable, usable space. It’s not those McMansions where you walk in and wonder, ‘What do you do in this room?’”

The base model runs around $1.4 million and features four bedrooms and 4.5 bathrooms, with the possibility of another bedroom and bathroom on an additional level. Costs will vary based on the different lot sizes and individual add-ons the purchasers want in their homes…

Another goal is to foster a 1950s sense of community among the owners of the nine properties, in which everybody knows and interacts with their neighbors. The homes will only be accessible via a private road and there will be a small fence around the subdivision…

The brothers noted The Barrett Companies’ effort toward green building and energy efficiency. From better insulation and caulking to installing appropriate outlets in the detached garages for plugging in an electric car, the Chamberlins believe small touches make their properties stand out.

These are big new homes that at first glance might fit several traits of McMansions. But, here is the argument the developer uses to say their homes are not McMansions:

1. The homes will fit the neighborhood. Critics argue McMansions, particularly teardowns, can disrupt the character of existing neighborhoods.

2. The home is not just about space; it is about well-designed and usable space. One argument about McMansions is that they provide lots of square footage but this is often contained in cavernous rooms or in poor layouts that are difficult to utilize in day-to-day life.

3. They are hoping to promote a community atmosphere in their small development. I wonder if this is primarily a function of size; the fenced-in neighborhood with a private road will only contain nine homes.

4. These homes will be greener than normal big homes. McMansions are often said to about excessive consumption and part of sprawl.

5. There will be a consistent design scheme with Georgian architecture and detached garages on the private road away from the streets surrounding the neighborhood. McMansions are criticized for mixing architectural styles.

In the end, I wonder if a majority of buyers and critics would think these reasons are enough to separate these homes from McMansions. These are still big homes in the midst of suburban neighborhoods. They may be more consistent and be less mass-produced but are they different enough?

Honduras moving forward with the construction of three private cities

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Honduras is moving forward in allowing three private cities to be built though some have voiced objections:

The “model cities” will have their own judiciary, laws, governments and police forces. They also will be empowered to sign international agreements on trade and investment and set their own immigration policy.

Congress president Juan Hernandez said the investment group MGK will invest $15 million to begin building basic infrastructure for the first model city near Puerto Castilla on the Caribbean coast. That first city would create 5,000 jobs over the next six months and up to 200,000 jobs in the future, Hernandez said. South Korea has given Honduras $4 million to conduct a feasibility study, he said…

The project is opposed by civic groups as well as the indigenous Garifuna people, who say they don’t want their land near Puerto Castilla on the Caribbean coast to be used for the project. Living along Central America’s Caribbean coast, the Garifuna are descendants of the Amazon’s Arawak Indians, the Caribbean’s Caribes and escaped West African slaves…

The president of Honduras will appoint “globally respected international figures” without financial interests in the projects to nine-member independent boards that will oversee the running of the cities, whose daily operations will be administered by a board-appointed governor. Future appointments to the board will be decided by votes by standing board members, Strong said.

I could understand how this would be alluring for governments that are struggling to attract foreign capital and create jobs. However, privatization on this scale sounds daunting and possible problematic. It is one thing to have developers own and run neighborhoods or particular projects; but a whole city? With separate international powers and not having to follow Honduran law? With a future promise of allowing citizens to vote? I could imagine some of the responses from urban sociologists who write about the privatization of public space. What happens when these developers run afoul of citizens or Honduran law and conventions? What kind of free speech rights will citizens have and will they have any say in what happens? It is one thing to have to follow the rules of corporations in private-public spaces in American cities (see these examples in San Francisco) but another when the whole city follows the guidelines of developers or “respected international figures.”

Assuming this moves forward and the cities are built, it will be fascinating to see what happens.

Signs of the “demographic train wreck” in retirement colonies in Florida

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One commentator suggests the expansion of retirement in Florida hints at larger demographic changes in the United States:

“There is a demographic train wreck coming that we are not really addressing nationally or in Florida,” says Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness.Over the next 20 years, the number of adults over 62 in the U.S. will double to 80 million, as the largest generation in American history retires. A demographic model that once looked like a pyramid, with a relatively small number of seniors with lots of younger people to support them, now more closely resembles a bobble-head doll. Right now in the U.S., four working age adults support each retiree. In 20 years, that ratio will slip to three to one nationally — and two to one in Florida…

Yet after years of stagnant population growth, Florida is adding new residents again, especially in those areas where it is growing gray. According to projections from Florida’s Office of Economic and Demographic Research, more than half of the five million migrants expected to flow into the state over the next 18 years will be 60 or older. This elderly population boom, fueled by the retirement of the Baby Boomers, the biggest generation in U.S. history, will profoundly change the face of Florida from a state that is simply very old, to a state with one of the oldest populations on the planet.

If it seems like there are a lot of wrinkled faces crowding the aisles at the Publix grocery store in Boca Raton now, just wait. By 2030, one in four Floridians will be older than 65, up from one in six today, with the 85-plus set the fastest-growing group, according to projections…

“Basically you are asking a bunch of old retired rich white people to vote for school bonds that benefit immigrant Latino kids,” says Jennifer Hochschild, a Harvard University professor who studies the intersection of politics, immigration and education. “This is a potential political disaster.”

It will be fascinating to see how this plays out. Currently, it sounds like developers have figured out there is quite a market for such retirement communities. I have wondered why these haven’t seem to have caught on in the same scalein more northern, even considering the weather.

Should retirees have the right or make the possibly wrong choice for the larger society by moving into more isolated communities of people their own age? I’m sure there are class and race differences present here as well – not everyone has the resources to move to Florida in their golden years. What happens when all of these older residents can no longer live in these communities and require more care?

Mayor Bloomberg, NYC want developers to build “micro-units”

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Tiny houses may just be catching on in urban areas: Mayor Bloomberg and NYC are pushing developers to build 300 square foot units.

Mayor Michael Bloomberg on Monday invited developers to propose ways to turn a Manhattan lot into an apartment building filled mostly with what officials are calling “micro-units” – dwellings complete with a bathroom, built-in kitchenette and enough space for a careful planner to use a fold-out bed as both sleeping space and living room.

If the pilot program is successful, officials could ultimately overturn a requirement established in 1987 that new apartments here be at least 400 square feet.

City planners envision a future in which the young, the cash-poor and empty nesters flock to such small dwellings – each not much bigger than a dorm room. In a pricey real estate market where about one-third of renter households spend more than half their income on rent, it could make housing more affordable…

Modern-day building codes and improved refrigeration and public health have changed what it means to live small, Bloomberg said. A typical mid-19th century tenement apartment on Manhattan’s Lower East Side might have been larger than one of the micro-units, measuring 325 square feet, but would have typically housed families with multiple children. The micro-units are to be leased only to one- or two-person households.

This could indeed be an interesting adaptation to demographic change. But I wonder: is New York City offering an incentive for developers to do this? Programs for affordable housing often come with some sort of incentive, something like if a developer builds a certain number of cheaper units, they are allowed to build a certain number of market-rate units. The article makes it sounds like there is significant demand for these smaller units in NYC which might negate the need for incentives. However, I haven’t yet seen any indication that developers believe building micro-units is worth it compared to what else they can build.

A-Rod real estate tax flap tied to incentive to construct affordable housing

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It appears that a number of luxury housing owners in New York City, including Yankees’ star Alex Rodriguez, are getting a major real estate tax break. While this is creating a stir, there is more to this story: these luxury units are getting a tax break because the developers have promised to build affordable housing elsewhere in the city.

Rodriguez and all the residents of his posh high rise will get tax breaks for 10 years under the city’s 421A tax abatement program. Luxury developers get tax breaks in exchange for making sure affordable units get built elsewhere. Rodriguez is one of some 45,000 New Yorkers who have scored the tax break.

“I think it’s outrageous,” Lewton said.

When Rodriguez’s moves into his $6 million, five-bedroom penthouse his tax bill will be $1,150. In contrast, Stephen and Phyllis Franciosa pay $3,100 in taxes one their one-family home in the Pelham Bay section of the Bronx…

The councilman said the law needs to be changed because this year alone the program will cost the city $900 million in lost revenue.

A-Rod’s taxes are so low that if he paid the going rate his tax bill would be 50 times higher. He should get such a break when he faces the Red Sox pitching staff.

City officials claim the tax breaks on Rodriguez’ building helped build over 575 units of affordable housing in the Bronx.

This is not an uncommon tactic for communities to encourage affordable housing: grant some tax breaks in exchange for the builder or developer constructing some units of affordable housing. It is often a struggle to get developers and builders to construct affordable units on their own as profit margins are lower. So communities have searched for incentives that would still allow builders to make their money while also providing for the public good.

In the long run, will this story simply be commentary about how the rich and famous get to play by different rules (and New York loves to pick on A-Rod) or can there be a reasonable discussion about how cities go about promoting affordable housing? I am guessing that the first option will easily win out. Why can’t New York news organizations go to those 575 units of affordable housing in the Bronx and talk to the other people who benefited from this tax break?